THE PAY CUTS and salary caps for semi-state workers may only be applied to any new appointments, after the cabinet was given legal advice suggesting capping existing wages could be illegal, it is reported this morning.

The Irish Examiner reports this morning that the government believes the senior managers of semi-state companies cannot have a new ceiling imposed on their wages, on the understanding that current bosses have legally binding contracts from which their employers cannot withdraw.

The Irish Daily Mail adds that as a result, the new proposed €250,000 salary limit for public employees expected to be introduced in tomorrow’s Budget can only apply to new employees – ensuring that senior managers or high-profile figures on many of the state’s “bloated” companies cannot have their pay tackled.

Top-level managers at many state-owned commercial bodies can therefore expect their current wages – each of which currently earns well in excess of the €250,000 cap – to be safeguarded, while subsequent appointments will have their pay packets capped.

Those earners include:

• Padraig McManus, ESB chief executive, who took home over €750,000 last year in pay and bonuses
• John Mullins, Bord Gais director, who earned a total of €361,000
• An Post chief executive Donal Connell, who earns €379,000
• Dublin Airport Authority chief Declan Collier, whose ‘basic’ wage is €348,000

Also among those whose wages are safeguarded are high-profile broadcasters at RTÉ – including Pat Kenny, Ryan Tubridy, Joe Duffy and Marian Finucane, who are known to earn well beyond the €250,000 threshold though their wages are a closely guarded secret – will also see their healthy earnings maintained.

Tánaiste Mary Coughlan told last night’s The Week in Politics programme that TDs and cabinet ministers would see their wages cut by between 5% and 10% in tomorrow’s Budget.

The exact scale of the cuts to politicians’ pay would not be agreed until later today, when the cabinet signed off on the last of the Budget’s measures.